The Money Tree

Safely Generating Income in Retirement

Archive for March 24th, 2011

New NP Trade – CCJ

Posted by mounddweller on March 24, 2011

Fellow Traders, 

Today I executed a new NP trade on the world’s largest uranium miner, Cameco (CCJ).  I put Cameco on my watchlist shortly after hearing about the disaster in Japan.  However, when I first looked at the chart and the options premiums I didn’t like the risk/reward ratio.  After reading this trader’s commentary (http://www.growthstockwire.com/) today I took another look at it.  I didn’t like Jeff Clark’s trade but decided I would take another look at the option tables to see if I could find something I liked better.  I found I liked the MAY $25 strike at $0.50.  So here’s the trade I made:

STO 4 MAY $25 puts at $0.50

This trade gives me a 2% ROIC with 58 DTE and over 22% DSP.  Jeff’s trade of the JAN ’12 $17.50 puts at $0.50 has a better ROIC and more DSP but ties up your capital for a much longer period of time.  If you check out the trading volume on Jeff’s recommended trade you’ll see a lot of lemmings followed his advice.  So much so that they significantly drove down the price of the put.

Haven’t seen any other compelling trades this week.  Best of luck to all of you out there.

Regards,

Troy

Posted in Portfolio Updates, Troy's New Picks! | Tagged: , | 1 Comment »